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October 25, 2017 | Interim Report
Haldex interim report, January - September 2017: Revenue growth in an improved market
Sales in all of Haldex’s geographic regions increased in Q3, with Asia leading the way. The market has continued to develop positively, with the largest improvement in North America. Haldex strengthened its position in Europe during the quarter, but has not been able to grow to the same extent as in the North American market. A number of product areas have shown strong growth, including disc brakes. Sales of actuators have also posted growth for the first time since the product recall in 2014. Operating income excluding one-off items is still lower than last year. The quarter continued to be burdened by the takeover process, which has diverted focus and resources from the core operations.  

Net sales for Q3 totalled SEK 1,081 (1,076) m, which is in line with the same period of the previous year. After currency adjustments, net sales increased by 3%. Net sales for the first nine months of the year totalled SEK 3,413 (3,320) m, which is equivalent to a currency-adjusted increase of 0.4%.

Operating income excluding one-off items totalled SEK 68 (80) m for Q3 and SEK 226 (244) m for the first nine months of the year, which is equivalent to an operating margin of 6.3 (7.4)% for Q3 and 6.6 (7.3)% for the first nine months of the year. The operating margin including one-off items totalled SEK 4.5 (6.3)% for Q3 and SEK 3.4 (6.9)% for the first nine months of the year. One-off items totalled net SEK 19 (12) m for Q3 and SEK 110 (12) m for the first nine months of the year.

The net income after tax for Q3 totalled SEK 26 (37) m, and the earnings per share for Q3 totalled SEK 0.59 (0.82). The equivalent figures for the first nine months of the year are SEK 65 (147) m for net income before tax and SEK 1.45 (3.29) for earnings per share.

Cash flow from operating activities totalled SEK 27 (65) m for Q3 and SEK 85 (168) m for the first nine months of the year.

A takeover process for Haldex was initiated on 14 July 2016. On 29 June 2017, the Board announced that it no longer supported the bid from Knorr-Bremse due to the low probability of approval by the competition authorities. On 19 September 2017, Knorr-Bremse withdrew its bid.

Key figures for July - September 2017
(same period previous year in brackets)

  •  Net sales, SEK m   1,081 (1,076)
  •  Operating income, excl. one-off items, SEK m   68 (80)
  •  Operating income, SEK m   48 (68)
  •  Operating margin, excl. one-off items, %   6.3 (7.4)
  •  Operating margin, %   4.5 (6.3)
  •  Return on capital employed, excl. one-off items,%1    12.6 (14.6)
  •  Return on capital employed,%1   4.2 (14.1)
  •  Net income, SEK m   26 (37)
  •  Earnings per share, SEK   0.59 (0.82)
  •  Cash flow, operating activities, SEK m   27 (65)

1)    Rolling twelve months

Key figures for January - September 2017
(same period previous year in brackets)

  •  Net sales, SEK m   3,413 (3,320)
  •  Operating income, excl. one-off items, SEK m   226 (244)
  •  Operating income, SEK m   116 (232)
  •  Operating margin, excl. one-off items, %   6.6 (7.3)
  •  Operating margin, %   3.4 (6.9)
  •  Return on capital employed, excl. one-off items,%1    12.6 (14.6)
  •  Return on capital employed,%1   4.2 (14.1)
  •  Net income, SEK m   65 (147)
  •  Earnings per share, SEK   1.45 (3.29)
  •  Cash flow, operating activities, SEK m   85 (168)

2)    Rolling twelve months

Comment from Åke Bengtsson, President and CEO: 

“Q3 2017 is the first quarter for me in the role as President and CEO. The appointment from acting CEO occurred in conjunction with Knorr-Bremse’s withdrawal of its bid for Haldex, and it is an exciting time to step into the CEO role. We can already see positive effects of no longer being under a bid. During the quarter, for example, we signed a three-year contract with a U.S. truck manufacturer for both actuators and brake adjusters; the customer had been waiting the outcome of the bid process. We also won back a U.S. truck customer who had chosen to buy brake adjusters from a competitor during the turbulent period that we were undergoing at the time.

Haldex will now accelerate the implementation of the strategy we laid the basis for in 2016. Our strategic position has been clarified over the past year through the feedback and support our customers have given us during the competition investigation. We are appreciated for our tailored, open and flexible solutions; we understand our customers’ problems and are prepared to resolve them together. It is a position on which we will continue to build. With product leadership as one of the five pillars of the strategy, it is rewarding to see that our development efforts together with customers in the area for self-driving vehicles have intensified in the past month. We also reached a new milestone in our joint venture on electromechanical brakes as we completed a first test phase with positive results.

Future ownership

Haldex is demonstrably a sought-after company. Long-term and strategic owners are important in our industry, which is characterised by long life spans on each vehicle platform. Today we have a stable main owner and to create opportunities for a long-term owner base is important to us. The technology shift in the industry to autonomous driving and the position we have, will attract investments in Haldex’ share.

Improved market conditions

The market conditions have gradually improved during the year, and we have seen that the North American market has clearly taken a turn for the better. Haldex increased its net sales in all regions during the third quarter, but has still not been able to fully benefit from the upturn. We won market shares in Europe, but despite growth in North America we have not successfully matched the market improvement. As a whole, however, we exceeded expectations in terms of staying focused on the operations.

Disc brake contracts in the USA

Some really good news is that our disc brakes were approved as an option for one of the market leading axle manufacturers in the USA. This is an important milestone for winning reference customers leading up to the approaching technology shift in the USA. Interest in switching from drum brakes to disc brakes is steadily increasing, and we are now laying the foundation for future expansion. Disc brake sales also continued to grow in Europe during the quarter.

Trend reversal for actuators

Last quarter we could see that the downward trend in actuators had been broken, and this quarter sales of actuators posted double-digit growth. It is very positive that we successfully broke the trend that started with the product recall at the end of 2014. During the third quarter, we also relaunched an upgraded version of the actuator that was the cause of the recall. After very extensive testing, we are now ready to once again offer our customers actuators with an sealed design, able to withstand extra tough road conditions. Haldex is since before the market leader in this product area with few competitors having sufficiently advanced technology to match our functionality.

New law boosts demand for brake adjusters

Another large product group that grew sharply during the quarter is the brake adjuster. This world leading product is popular on the U.S. market, and the upswing in the number of manufactured vehicles has a positive effect on demand for brake adjusters. A change in the law in China will also boost demand for brake adjusters since it has now been decided that new manufacture of heavy vehicles must use automatic brake adjusters starting in January 2018. Brake adjusters will contribute positively to the profit margin going forward.

Profitability and cost levels

As previously announced, Haldex’s margin will not reach the level from previous years. The higher cost level is due to a number of factors. We believe that it is crucial for Haldex’s future competitiveness to continue to carry out important development projects. Higher R&D expenditure is thus the right road forward. The launch of the actuator has result in a temporary increase in inventories, which is expected to fall once the product reaches the market. The upswing in demand during the third quarter, while positive, also resulted in higher costs. For example, we added more shifts in some factories and deliveries had to be rescheduled at a higher cost.

Market outlook and forecast for 2017

The assessment of 2017 is that it will be a year during which production volumes could exceed last year’s levels, but with the unexpected and rapid change in demand we are still in a situation where we cannot fully benefit from the situation. Our earnings forecast for 2017 has not changed. Our ambition is to continue to ensure good profitability, but due to higher costs from the takeover process, the operating margin for 2017 is forecast to be slightly lower than in 2016.

However, we are convinced that, as we approach 2018, Haldex will be able to benefit from the improved market conditions and current strategic partnerships will result in an even stronger position in the market. We can also close the door on an uncertain and very intense period. As a company, we are emerging from the process much stronger in many aspects, primarily thanks to the great support we received from customers around the world. Our dedicated employees have also created a strong sense of unity and forward drive in the company.”

Åke Bengtsson
President and CEO

Full interim report

The full interim report is available at http://corporate.haldex.com/en/investors/financialreports or at http://news.cision.com/haldex

Press and analyst meeting

Media and analysts are invited to a telephone conference at which the report will be presented with comments by Åke Bengtsson, President and CEO and Andreas Ekberg, acting CFO. The presentation will also be webcasted live and you can participate with questions by telephone.

Date & Time: Wednesday, October 25 18 at 11.00 CET

The press conference is broadcasted at:


To join the telephone conference:

SE: +46 8 519 99 364

UK: +44 203 00 898 03

US: +1 855 831 59 44

The webcast will also be available afterwards and you can download the Interim report and the presentation from Haldex website: http://corporate.haldex.com/en/investors  

For further information, visit http://corporate.haldex.com or contact:

Åke Bengtsson, President & CEO
Phone: +46 418 476150

Andreas Ekberg, acting CFO
Phone: +46 418 476150

Catharina Paulcén, SVP Corporate Communications
Phone: 46 418 476157
E-mail: catharina.paulcen@haldex.com

Haldex AB (publ) is required to publish the above information under the EU Market Abuse Regulation. The information was submitted for publication by the Haldex media contact stated in the release on October 25, 2017 at 7.20 CEST.

This document is essentially a translation of Swedish language original thereof. In the event of any discrepancies between this translation and the original Swedish document the latter shall be deemed correct

About Haldex

With more than 100 years of intensely focused innovation, Haldex holds unrivaled expertise in brake systems and air suspension systems for heavy trucks, trailers and buses. We live and breathe our business delivering robust, technically superior solutions born from deep insight into our customers’ reality. By concentrating on our core competencies and following our strengths and passions, we combine both the operating speed and flexibility required by the market. Collaborative innovation is not only the essence of our products – it is also our philosophy. Our 2,150 employees, spread on four continents, are constantly challenging the conventional and strive to ensure that the products we deliver create unique value for our customers and all end-users. We are listed on the Nasdaq Stockholm Stock Exchange and have net sales of approximately 4.4 billion SEK.